Shenzhen-based Iflytek (002230.CN) is not a household name yet, but MIT ranked it as the sixth smartest company in its world’s 50 smartest companies list released in June, behind global titans like Amazon (No. 3) and Google (No. 5), but ahead of Chinese tech giants like Tencent (No. 8).
Established in 1999, Iflytek is a Chinese pioneer in artificial intelligence (AI) research and development. The company has drawn investment from Chinese conglomerates like Fosun and Lenovo.
At the forefront in the AI space, Iflytek has recently developed a face recognition technology that has been incorporated into Huawei’s Honor Magic smartphone line.
The technology enables smartphone owners to hide some private information away from others. The handset camera can tell whether the user is the owner, and if not, certain designated information, such as photos or messages will be locked in.
Some jokingly said this technology would be very popular with men, who may not want girlfriends to know their secrets.
Of course, the true purpose of the technology is to protect personal data. It can also be applied to the protection of business information.
However, the new technology involves Huawei’s tapping into the user data of the popular instant messaging app WeChat. And this is what triggered a fight between Huawei and Tencent.
Huawei argued its access has been authorized by users through phone settings. But Tencent, which operates WeChat, regarded that as a breach of its customer database.
The episode reminds us of the standoff over user data between E-commerce titan Alibaba’s logistics unit Cainiao and the nation’s largest courier SF Holding Co. (002352.CN) in June.
The standoff began with SF Express refusing to provide data required by Cainiao for increased security verification, claiming these data did not originate from Taobao. Cainiao hit back, accusing SF of excessively using its Taobao customer data. It also removed SF Express as a shipping option and advised merchants to select alternative delivery methods. The data sharing resumed after the Chinese authorities stepped in.
Yet, these tussles demonstrate that user data is becoming a new strategic resource, something like oil in the old days.
This article appeared in the Hong Kong Economic Journal on Aug. 7
Translation by Julie Zhu
[Chinese version 中文版]
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